What actually was left of Jay Gould's fortune? In the Supreme Court, in New York, on June 1, 1927, Justice John M. Tierney had approved a settlement whereby the trustees of the estate were authorized to distribute more than $16,000,000 among the six trust funds which Jay Gould had established for his six children. At the same time Justice Tierney approved the payment of $2,703,635 to the fifty lawyers who had represented Jay Gould's children, grandchildren and great grandchildren; one law firm, attorneys for Frank J. Gould, was allowed more than $580,000; Samuel Seabury, counsel for the same, nearly $500,000, and other lawyers concerned each a considerable sum. As for George J. Gould's palatial $2,000,000 Georgian Court it was sold in 1924 to Mount St. Mary's College, of North Plainfield, N. J. for a sum reported to be $800,000. Two years previously his costly New York City mansion, built in 1908 at Fifth avenue and Sixty-seventh street, and the scene of many glittering social functions was put on the market for sale.

THE RUSSELL SAGE FORTUNE

To deal with the individual lot of various of Jay Gould's children is hardly a necessary part of this narrative.

There remains one essential. This is to contrast the respective sequels of the Gould and Russell Sage fortunes. Jay Gould believed that he had founded a dynasty of wealth. Its permanency, he was confident, was adequately safeguarded. Russell Sage had no such idea. He had accumulated and held for the sheer love of money but his aim began and ended with that one personal obsession. All of his wealth went to his widow to be used or disposed of as she pleased. Once it was in her possession she gave large sums to universities, churches and institutions. Mrs. Sage died on November 4, 1918, and in 1919 her estate was appraised at $49,051,045 gross, and $45,261,724 net. Valued at $35,000,000, a host of securities in many corporations formed the bulk of the estate. To relatives she bequeathed some millions, and about $40,000,000 for the benefit of a long list of educational, philanthropic institutions. She was credited, and justly, with having made amends for the total lack of social attitude or obligation on the part of her husband. It was, therefore, all the more noteworthy that one of her most useful benefactions was named after him. This endowed establishment was the Russell Sage Foundation to which she gave $5,436,104. For one of the features of this Foundation, its library on social subjects, students availing themselves of its facilities have cause to feel grateful to Mrs. Sage's memory in her providing a much-needed place of specialized information.

Chapter XVII

THE BLAIR AND THE GARRETT FORTUNES

1

OF John I. Blair little is now heard, yet when he died in 1899, at the age of ninety-seven, he left a great personal fortune, estimated variously at from $60,000,000 to $90,000,000; his wealth, descending largely to his son, De Witt C. Blair, formed one of the notable estates in the United States. Here, according to the purveyors of public opinion, was an honest man; here incontestably was a capitalist of "rare business instinct," whose fortune came from pure, legitimate and upright methods. “For more than half a century," said one newspaper editorial 1 at his death, "he has been one of the leading business men in the country, and for more than a quarter of a century one of the richest men in the world, his fortune being estimated at from $50,000,000 to $100,000,000, every farthing of which came to him through legitimate channels, creating other wealth on its way to him, as well as after it had reached his hands." This was not an isolated eulogy; round and round the columns of the press went these pæans with never a dissent or demurring.

AN INQUIRY INTO BLAIR'S CAREER

Through all of these pages have we searched afar with infinitesimal scrutiny for a fortune acquired by honest means. Nor have the methods been measured by the test of a code of advanced ethics, but solely by the laws as they stood in the respective times. At no time has the discovery of an "honest fortune" rewarded our determined quest. Often we thought that we had come across a specimen, only to find distressing disappointment; through all fortunes, large and small, runs the same heavy streak of fraud and theft, the little trader, with his misrepresentation and swindling, differing from the great frauds in degree only. Have we, at last, in Blair's, stumbled upon one fortune unblemished by any taint whatsoever? Can we now exclaim, Eureka! So it would seem if current comment is to be swallowed as the fact. But inasmuch as we have doggedly developed an exploring, if not a perversely skeptical turn of mind, let us gratify it to the full by investigating the career of this paragon of commercial virtue.

Now it does so happen that whatever the reserved, sequestered life Blair led in his dotage, basking in the titular glory of wonderful business man and philanthropist, he left a large, resounding impress upon indus'New York "Tribune," August 27, 1899.

trial events of fifty and sixty years ago. The surviving records, buried in obscurity, emerge from their forgotten shelves to confound the fairy tales of eulogists. He was contemporaneous with Commodore Vanderbilt, the first John Jacob Astor, and Russell Sage; and he was as excellent a business man as any of them, which is to say, his methods were relatively the same as theirs. Blair was demonstrating in his own way that he, too, had all the necessary qualifications of "a leading business man."

Born near Belvidere, N. J., in 1802, his parents were farming folk; and his biographers related with a blissful smack of appreciation that when he was a very young boy he announced to his mother that, "I could go in for education, but I intend to get rich." Like Sage, he started as a clerk in a country store, and he then widened into being the owner of a general merchandise store, at what is now Blairstown, New Jersey. Years passed and he prospered, his panegyrists told, and he then opened a number of branch stores. But this part of his career is shrouded in mere tradition; nothing authentic is known of his methods at the time.

BLAIR AS A RAILROAD BUILDER

Blair next turned up as the owner of an iron foundry at Oxford Furnace, N. J., and it is from this point of his career that definite facts are embodied in official records. "The necessity for transporting the metal to the seaboard," wrote one biographer, "led Mr. Blair and others to organize the Lackawanna Coal & Iron Company, out of which has grown the great system of the Delaware, Lackawanna & Western Railroad." With this all-inclusive sentence the biographer airily dismissed this part of the subject. But there are weighty reasons why we should dwell upon it, with brief, yet sufficient explanation, for it was in this operation that Blair made his first millions; it was here that he gave the first scintillating demonstrations of his "rare business instincts."

Had it not been for an acrimonious falling out between him and his associates in this railroad business, the truth would be beyond reach. As it is, these men made the huge error of perpetuating their quarrel in print; an unpardonable blunder if the good opinion of posterity is to be held. This quarrel arose over such a sordid matter as the allotment of graft; it was a bitter, ungentlemanly row, as is all too clearly evidenced in the biting denunciations of one another that were put in the reports by the disputants themselves. From these reports it appears that Blair was, indeed, doing business in the accustomed style; he was selling, at excessive prices, the products of his mill to a railroad corporation of which he was a director, and individually building branch lines which he foisted at enormous profit upon the corporation.

The Delaware, Lackawanna & Western Railroad, now one of the very richest in the land, was organized in 1850 by the grouping of a number of small, separate lines. To secure franchises and special rights and aid, the usual procedure of bribery was resorted to, and with unfailing success. The men at the head of it knew their slippery trade well; they were

the same rich merchants who were involved in other transactions. Some of them we have accosted before in these chapters-George D. Phelps, John J. Phelps, William E. Dodge, Moses Taylor and others. With John I. Blair these men formed the board of directors of the Delaware, Lackawanna & Western Railroad Company.

One of the separate lines incorporated in this railroad was the Warren line, crossing New Jersey into Pennsylvania. The building of this road, as nearly as can be made out from the law records, was attended with some very peculiar circumstances. Two sets of capitalists were competing for a franchise to extend their railroads through the mountains to the Delaware Water Gap; one was the Morris & Essex Railroad Company, the other the Warren Railroad Company, headed by Blair and Dodge. Both, in 1851, obtained charters from the New Jersey Legislature within a few days of each other's grant. In those years scandal after scandal was developed in successive New Jersey legislatures; it was no secret that the railroad magnates not only debauched the Legislature and the common councils of the cities with bribes, but regularly, in true businesslike style, corrupted the elections of the State. In 1851, for instance, the only candidates balloted for by the Legislature for the post of United State Senator were rival railroad nabobs; the very same men who, it was notorious, had for years been bribing and corrupting.

Which of the two sets would succeed in building its railroad extension first? The Legislature had accommodated both with charters for the same route; in that respect they were on an equal footing. But Blair and Dodge completely outwitted the Morris & Essex set, and went on to claim prior rights for their lines. The Morris & Essex Railroad Company charged fraud and went hotfooted into court after an injunction, which temporarily it obtained. The case came up for final adjudication in the New Jersey Court of Chancery in 1854. The Morris & Essex group asserted that they had bought the right of way through the Van Ness Gap, and charged Blair with taking fraudulent possession of these lands for the purpose of "fraudulently frustrating the complainants in the extension of their road"; that the survey made by Blair and Dodge was fraudulent, and that there were other frauds. In his answer Blair put in a general denial, although he admitted that the Morris & Essex Railroad Company had bought the land and received deeds for it, but averred that this took place after the lands had been conveyed to the Warren Railroad Company. Each side charged the other with fraud; undoubtedly the assertions of both were correct. Judge Green decided in favor of Blair and dissolved the injunction.2 Subseqently the Warren

2 New Jersey Equity Reports, ix:635-649.

The chief owner of the Morris and Essex Railroad was Edward A. Stevens who, for many years, blackmailed a competing line, the New Jersey Transportation Company, and who, when that company finally refused to continue to pay blackmail, bribed, it was charged, the New Jersey Legislature to pass retaliatory measures. See a later chapter.

Railroad was unloaded upon the Delaware, Lackawanna & Western Railroad at a great profit.

CHARGES OF JOBBERY AND GRAFTING

At first, the relations among Blair, the Phelpses and Dodge must have been of that brotherly unity springing from the satisfactory apportioning of good things. Previous to 1856, the annual reports of the board of managers of the Delaware, Lackawanna & Western Railroad Company breathed the most splendid harmony, with never a ripple of discord. As president of the company, Phelps had appointed Blair the land agent for the Warren division of the railroad.3 Very evidently a joyous, comfortable spirit of satisfaction with the way things were progressing pervaded this stalwart group of worthies.

Suddenly the tenor of their private and public communications changed. Peppery statements, growing into broadsides, were issued, filled with charges and counter charges, and a caustic quarrel set in over the question of graft, especially in connection with the Warren railroad. On September 9, 1856, Phelps resigned from the presidency, and in doing so, practically charged others of the directors with carrying on a profuse system of grafting in the purchase of land, supplies and branch lines.

Did Phelps resign as a protest? More probably, the actual situation was that the internal fight sprang up over difficulty in adjusting the division of the spoils, and the anti-Phelps faction had proved itself the stronger. Phelps set forth his case in published confidential statements accompanying the annual reports. He boasted that after the franchises of the Delaware, Lackawanna & Western Railroad had been forfeited for non-compliance, that it was he who had got through an act on April 2, 1885, "restoring all franchises and granting other important privileges." He complained of the exorbitant expenditures the directors were making, and significantly pointed out that when he had wanted to get an auditor, Blair and other directors refused to vote for one. Referring to the process of graft Phelps wrote that "one of our managers [Blair] is a director and large stockholder in the Lackawanna Iron & Coal Company; one-eighth owner in the Lehigh & Tobyanna Land Company; largely interested in real estate along the line of the road and president of the Warren railroad, of which his son is a principal contractor. Another son is director and very large owner in the Lackawanna Iron & Coal Company," etc. In another confidential circular, dated January 17, 1857, Phelps criticized Blair as "one of the parties more particularly referred to" and as "systematically opposed to my measures." If this much came out in cold type, what must have been the whole story? The

3

"Second Annual Report of the Board of Managers of the Delaware, Lackawanna and Western Railroad Company, 1855":8.

* "Confidential Statement to the Stockholders of the Delaware, Lackawanna and Western Railroad Company, 1856":6.